The Social Setting 97When the García-Meza dictatorship, including its nefarious
drug connections, was featured in the US television news
magazine Sixty Minutes in the early 1980s, the whole world
momentarily discovered Bolivia, and local advocates for
democracy received the international support they had
been craving. García-Meza was overthrown in 1981 and
democracy was reestablished, in times of economic crisis.
Eventually, the Bolivian justice system saw fi t to jail García-
Meza for life.
Economics and Democracy
Infl ation Out of Control
A long bout with hyper- infl ation threatened to abort the move towards
democracy. My wife recalls an occasion when she was in line to
purchase a record album. The salesperson had already quoted the
price. By the time the client in front of her had been attended to, a
phone call had come in and the price of the record had doubled. In
1985, infl ation reached 20,000 per cent!Bolivia became the proving grounds for free-market shock
treatment. This brand of anti-infl ationary economics, designed
by Harvard professor Jeffrey Sachs, was largely successful in
stopping infl ation, though Sachs warned at the time that the
narrow choice was between poverty with infl ation or poverty
without it. No one mentioned that the underground cocaine trade
might have been at least partly responsible for the post-
Sachs improved balance of payments. As Sachs had
frankly warned, recession continued. (More recently,
Mr Sachs has criticised draconian fiscal adjustment
requirements of international fi nancial institutions as they
routinely trigger social unrest in Bolivia.)
Although Bolivia is often labelled the second poorest nation
in the Américas, “saved from total disgrace by Haiti” said
one economist, per capita income information used for this
statistic is somewhat misleading. Bolivia’s cost of living is low.
Within the lower tier of the economy, for example, one can
fi nd a full course lunch for US$ 0.50. Healthy items such as
fruit and vegetables may be purchased at outdoor markets